Informal sector dynamics play a significant role in urban economies across Africa, including Madagascar's informal sector which is crucial for job creation and poverty reduction. Qualitative methods were employed through semi-structured interviews with entrepreneurs and focus group discussions with community members. Data analysis involved thematic coding and content analysis. A key finding is the prevalence of family-run enterprises (75%) in urban areas, indicating strong reliance on familial networks for business operations. The findings highlight the importance of understanding informal sector dynamics to inform policy that supports sustainable economic growth in Madagascar’s urban areas. Policymakers should consider supporting community-led initiatives and strengthening regulatory frameworks to foster a more inclusive urban economy.